Misleading Real Estate Advertising
The advertising company in real estate sales is the means used by the construction company to promote the sale of its civil projects; however, many times these companies resort to misleading offers in order to attract potential buyers that benefit both the developer and the construction company.
Is there a direct relationship between the real estate developers and the company carrying out the civil project? What is the contractual relationship between the two and how to respond in case of advertising fraud?
Under the premise that the purpose of advertising is to disclose a product in order to stimulate its consumption, the exacerbated abuse of real estate developers when promoting housing projects has been observed with particular notoriety.
It is assumed that the offer of promises generally used by developers that the projects offered are “pending approval” by the construction company does not justify that what is offered is different from what was offered.
In this regard, the Supreme Court Chamber states in Audiencia Provincial Sección N. 4, A Coruña, Sentencia: 00107/2015 del 30 de marzo de 2015, MARTINSA FADESA, S.A vs Don Jerónimo: “It then considered the consumer protection regulations regarding the information to be provided in the sale and purchase [Omissis…] of homes, especially in relation to the enforceability of the offer, promotion and advertising that is made [Omissis…].
The exclusive obligation of the developer to complete the work in such a way that it meets the construction characteristics publicly offered to future buyers was highlighted, with jurisprudence on the impact of the advertised and promised advertising aspect of the contract of sale”.
This denotes the Supreme Court’s position that the advertising carried out by the real estate company is contractually linked to its construction projects.
The promotion of the sale is carried out with the purpose of economically affecting the potential buyer, so that the relationship between the Real Estate – Construction Company and the buyer is intrinsic in the publicity that must be consistent with the contract that concludes the sale.
However, although it is true that in the process of construction of real estate projects, situations may arise that alter the result expected by the construction company, thus contracting the dynamism of these processes, it is no less true that the offer made must be contained to the project proposed.
That is to say, the real estate company cannot advertise idyllic spaces surrounded by paradisiacal views and other hopes for the potential buyer, under the weight of their need, when the reality of their sale will be the delivery of projects far from what is offered.
Thus, the judgment of the Provincial Court of A Coruña of March 30, 2015 is very clear in this regard, condemning the real estate developer to compensate the seller with a 25% reduction in the price of the property for not finally adjusting the promotion to the advertised characteristics.
“The relevance of advertising in the decision-making process of an average buyer is increasing, as is the possibility of creating a false expectation that deprives him of the possibility of weighing the convenience of acquiring a home in certain conditions.”
Real estate advertising is therefore pre-contractual evidence for the buyer, in the event that his interests are affected by misleading advertising by the developer.
Without leaving aside the possible civil, administrative and criminal liability that could fall on the construction company, not only for omission in the review of the advertising that the developer that contracts, but for the acts or facts that derive from the delivery of real estate or urban projects that are far from the reality of what was offered.
Additional information: legaltoday
